Corre Energy B.V., announced that its North American subsidiary, Corre Energy US Development Company LLC, has entered into an exclusive agreement to acquire a 280-megawatt (MW) / 4.2 gigawatt-hour (GWh) energy storage project from Contour Energy, a Texas-based energy storage infrastructure developer.
Following completion of confirmatory due diligence, the buyout transaction is expected to close before the end of this year.
Located in the West Texas region of ERCOT, the utility-scale storage project will be capable of continuously discharging 280MW of electrical power for up to 15 hours, equating to 4.2GWh of fully dispatchable electric energy storage capacity. The project is targeted to achieve financial investment decision (FID) stage in 2025 ahead of full commercial operation.
The project's technology is based on Compressed Air Energy Storage (CAES). CAES is a fully commercial technology that can use clean and low-cost renewable energy to compress air into underground salt caverns when the demand for electricity is low and wholesale electricity prices are cheap. Electricity is then released to the grid when wholesale electricity demand and prices are higher, enhancing the stability, reliability, and security of the electricity grid.
This announcement builds on Corre Energy's recent Operational Update that outlined the Company's pathway to having 1.3GW of storage under construction by 2026. It also follows Corre Energy B.V.'s landmark option agreement last month to develop four salt caverns in Germany, effectively doubling Corre Energy's European project portfolio.
Corre Energy US Development Company LLC was established at the beginning of 2023 to acquire early-stage projects and build others on a greenfield basis. Highly favorable government policies, notably the US Inflation Reduction Act and similar financial stimulus in Canada – have created unique opportunities to expand Corre Energy B.V.'s project portfolio.
Keith McGrane, Chief Executive Officer of Corre Energy, B.V., said: "We're extremely pleased to see our North American operation get off to such a strong start. We're especially excited that our North American subsidiary's flagship project is in Texas, considered by many analysts to be the most economically attractive market for utility-scale energy storage in North America."
McGrane added: "We've reached a pivotal moment in the earth's climate crisis. Now is the time to deliver impact and invest in long duration energy storage. CAES is a proven storage technology that can time shift electricity on a bulk basis for very long periods at a fraction of the cost of other commercial energy storage technologies."
Chet Lyons, president of Corre Energy US Development Company LLC, said: "Core Energy has demonstrated a route to market via long-term storage contracts in Europe which we are able to replicate in the US. Our projects can offer investors predictable and stable income with revenue growth while delivering positive societal impact. We will continue to source more opportunities and, in the meantime, look forward to working with Contour Energy, the original developer of the Texas site, to deliver this important project."
Funding for North American acquisitions will run in conjunction with the Company's wider funding process and is expected to be structured to complement Corre Energy's projects and portfolio growth in Europe while increasing the total enterprise value of Corre Energy B.V.
